Is Apple Taking Advantage Of Spotify?
According to a note written by Amit Daryanani to clients, our favorite tech company, Apple, could very much see Spotify’s increasing reach in the music-streaming industry as an opportunity and use it to their advantage.
In the note, Daryanani articulates how the tech company, famous for their logo of an apple that looks like someone took a bite off, could seek to start using Spotify’s model which supports ad. This ad-supported model is actually one of the main factors that helped Spotify get so many of their paid subscribers.
If Daryanani’s note is anything to go by, the end game will come as good news to shareholders in the Apple Company as he suggests they could, in fact, use the model in a better way. Once this is actualized, it is bound to make Apple’s share be on the rise.
If You Can’t Beat Them, Take Advantage of Them
With the number of waves Spotify has been making, it’s quite obvious that it has come to stay, and as such, it is highly improbable that any of their competitors can knock them off their horse.
When Spotify made the bold move to take their company public, aficionados of the music streaming industry ultimately agreed that this spelled doom for Apple’s music-streaming service – Apple Music. However, Daryanani was able to see a cloud with a silver lining for Apple if they could only take lessons from Spotify and use those lessons as an opportunity by taking advantage of the scheme responsible for most of Spotify’s revenue – advertising. Learn, join and CONQUER!
In the note, Daryanani wrote how Spotify has their paid subscribers to thank for about 90% of their total revenue. He wondered if a model similar to that of Spotify’s would symbolize an unexploited opening for Apple.
How Would They Maximise this Opening?
Making use of the idea of Spotify’s ad-supported model, Apple could begin by implementing an ad-supported model of Apple Music albeit free to attract users (who doesn’t like free things?). Once Apple has raked in enough users, they would then transform them into paid subscribers.
Seems pretty easy? THAT’S NOT ALL! In the note, Daryanani explains how the ad-supported model could also disclose more about user-behavior and content-consumption as it can serve a second purpose of producing data that could also be used to the company’s advantage. Daryanani came to this conclusion after noting that the data garnered from Spotify’s user base is considerably greater when compared to that of Netflix.
He argued that considering the spending power of most people who use Apple products, if an amount of data similar to that of Spotify is made available to Apple, it is bound to have a higher prospective of bringing in more revenue for the company.
Following the facts entailed in the filing, as of 31/12/2017, Spotify had about seventy-one million premium users and one hundred and fifty-nine monthly subscribers, figures which amount to almost two times the 36million global subscribers the Wall Street Journal claimed Apple had.
Spotify is said not to currently run the risk of losing their premium subscribers to their competitors as it reports that the number of subscribers that decide not to use their services anymore reduces by the year. They stated that the rate at which their Premium Subscription subscribers cancel their subscriptions decreases yearly.
According to Daryanani’s note, although Spotify’s encroachment on the US music-streaming industry is getting bigger by the day, all hope is not lost for Apple Music as they are still very much in play and could even end up attracting more paid subscribers who reside in the US than Spotify.
Last year, Apple’s stock was quoted at $175.40 per share, before rising by an estimated 1.91% to put it at the price it is being traded for now ($178.85). However, if Apple were to implement an ad-supported model, RBC predicts the price of their share to increase by 15% to make it rise to $205.
More in Business
Shares Continue to Drop as Tesla Prepared to Take Over European Market
When Tesla revealed that they have a massive debt of $920 million to be paid for this coming March, investors and...February 18, 2019
SmartAsset Lands $28 Million in Series C Funding
About SmartAsset SmartAsset reportedly launched its first tool in 2012. The tool’s primary aim was to assist consumers to make significant...February 18, 2019
How to Evaluate the Real Cost of Home Renovation
Justification of Home Renovation It is a common saying that for each penny one invests while carrying out home renovations, returns...February 18, 2019
Amazon to Pay Less Than a Billion Dollars for The Acquisition of PillPack
Amazon’s Acquisition Media outlets reported that Amazon announced its acquisition of PillPack yesterday. PillPack is an online pharmacy company that allows...February 18, 2019
Strategies to Help Boost Your Productivity at Work
It isn’t uncommon to find people desperately wishing that they had more working hours to get things done. In fact, recent...February 18, 2019
Increasing Your Employment Chances as an Employed Job Seeker
Unemployed v Employed A study recently released by the Federal Reserve Bank of New York confirms the common knowledge that...February 18, 2019
Parents Are Reportedly Giving Early Money Lessons to Their Kids
Gen X and Millennial Parents A Study recently released by Capital Group revealed that parents nowadays are having talks with their...February 18, 2019
Financial Preparations for Life After a Divorce
Divorce Affects Finances Often, a divorce affects not only the emotions of the couple but also other aspects of their lives...February 18, 2019
Chinese Venture Capital Firms Put Several Silicon Valley Start-ups at Risk
CFIUS Review News agencies reported that Danhua Capital, a venture capital firm, has made considerable investments in a couple of Silicon’s...February 18, 2019